Plan Floated to Spread Risk in Mortgage Bonds

By

Alan Zibel

October 14, 2011

The Obama administration and a federal housing regulator are considering a program to draw private investment back into the government-dominated mortgage market by having Fannie Mae and Freddie Mac sell slices of securities that wouldn't carry a federal guarantee but would pay a higher interest rate than current mortgage-backed bonds.

No decisions have been made, but officials believe a small pilot program could be rolled out...